Correlation Between Franklin Convertible and Fidelity Convertible
Can any of the company-specific risk be diversified away by investing in both Franklin Convertible and Fidelity Convertible at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin Convertible and Fidelity Convertible into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Vertible Securities and Fidelity Vertible Securities, you can compare the effects of market volatilities on Franklin Convertible and Fidelity Convertible and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin Convertible with a short position of Fidelity Convertible. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Convertible and Fidelity Convertible.
Diversification Opportunities for Franklin Convertible and Fidelity Convertible
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Franklin and Fidelity is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Vertible Securities and Fidelity Vertible Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Convertible and Franklin Convertible is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin Vertible Securities are associated (or correlated) with Fidelity Convertible. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Convertible has no effect on the direction of Franklin Convertible i.e., Franklin Convertible and Fidelity Convertible go up and down completely randomly.
Pair Corralation between Franklin Convertible and Fidelity Convertible
Assuming the 90 days horizon Franklin Vertible Securities is expected to generate 0.51 times more return on investment than Fidelity Convertible. However, Franklin Vertible Securities is 1.96 times less risky than Fidelity Convertible. It trades about -0.38 of its potential returns per unit of risk. Fidelity Vertible Securities is currently generating about -0.27 per unit of risk. If you would invest 2,464 in Franklin Vertible Securities on October 12, 2024 and sell it today you would lose (134.00) from holding Franklin Vertible Securities or give up 5.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Vertible Securities vs. Fidelity Vertible Securities
Performance |
| Timeline |
| Franklin Convertible |
| Fidelity Convertible |
Franklin Convertible and Fidelity Convertible Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Convertible and Fidelity Convertible
The main advantage of trading using opposite Franklin Convertible and Fidelity Convertible positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Convertible position performs unexpectedly, Fidelity Convertible can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fidelity Convertible will offset losses from the drop in Fidelity Convertible's long position.| Franklin Convertible vs. Guidemark Large Cap | Franklin Convertible vs. Americafirst Large Cap | Franklin Convertible vs. Ab Large Cap | Franklin Convertible vs. Calvert Large Cap |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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